TikTok taps Oracle as US partner

Oracle confirms it'll act as a "trusted technology provider" for TikTok.

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3 min read

Chinese tech company ByteDance owns short-form video app TikTok.

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ByteDance has chosen  Oracle  as a US partner for its popular  TikTok  video service, a decision that comes as a deadline for a ban of the popular app draws near.

In a brief statement on Monday, Oracle confirmed that it's part of a proposal submitted by ByteDance to the US Treasury Department. The confirmation followed Treasury Secretary Steven Mnuchin telling CNBC on Monday that the US government plans to review the deal with Oracle this week. 

"Oracle confirms Secretary Mnuchin's statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider," the company said in a statement. "Oracle has a 40-year track record providing secure, highly performant technology solutions."

Oracle didn't share details on the deal, but it's expected to meet the needs of TikTok's users, as well as satisfy American national security concerns, a person familiar with the situation said. A TikTok spokeswoman also confirmed that the company submitted a proposal to the Treasury Department that it believes would address national security concerns.

"This proposal would enable us to continue supporting our community of 100 million people in the US who love TikTok for connection and entertainment, as well as the hundreds of thousands of small business owners and creators who rely upon TikTok to grow their livelihoods and build meaningful careers," TikTok said in a statement. TikTok has repeatedly pushed back against allegations that the app could be used by the Chinese government to spy on US citizens, noting that US user data isn't stored in China. 

The deal likely won't be structured as a sale, The Wall Street Journal reported, and still needs US government approval. The US Department of Treasury didn't immediately respond to a request for comment. 

The US government could approve the agreement as soon as Tuesday afternoon, CNBC reported. But it could still run into headwinds in Beijing, which has raised concerns about any deal.

Microsoft, which was pursuing a deal along with partner Walmart, said in a statement that its bid was rejected by Beijing-based ByteDance. The software giant had been seen as the front-runner in negotiations. 

"ByteDance let us know today they would not be selling TikTok's US operations to Microsoft," said Microsoft in a statement on Sunday. "We are confident our proposal would have been good for TikTok's users, while protecting national security interests."

Microsoft said it would have made "significant changes" to TikTok to ensure security, privacy, online safety, and combating disinformation.

In early August, President Donald Trump, citing national security concerns, announced his intention to ban TikTok unless it was purchased by a US company. Speaking to reporters, Trump mentioned Microsoft as a candidate -- the only company the president explicitly referenced -- making it the public front-runner to buy TikTok over the past month. An executive order formalizing the threat of a ban was issued on Aug. 6. A subsequent order required ByteDance to divest TikTok by Nov. 12.

Oracle's interest in purchasing TikTok was reported weeks after Trump's original executive order. "I think Oracle is a great company," Trump said ahead of a rally in Yuma, Arizona, responding to the reports. "I think Oracle is someone that could handle it." Trump also called Oracle co-founder Larry Ellison a "tremendous guy."

Ellison is one of the tech industry's best-known Trump supporters. In February, he hosted a fundraising event for the president that caused some of Oracle's workers to stage a walkout in protest.

A deal was said to be close earlier this month, though several barriers remained. ByteDance has said the AI-powered algorithm behind TikTok -- arguably the app's greatest asset -- won't be part of the deal, according to the South China Morning Post. In late August, China updated the country's export control rules to cover sensitive technology, suggesting ByteDance likely needed Beijing's approval for any US deal. It's unclear how Oracle's partnership with ByteDance will address these potential hurdles, as made clear by CGTN's Sunday report.

The White House didn't immediately respond to a request for comment.